Unfortunately, visualizing your organization this way creates broken thinking. It encourages the notion of a "chain of command" where "decision-makers" control the behaviors of the "low level" people underneath.

That way of thinking tends to create failure because it misses the entire point of business, which is satisfying customer needs. In fact, you'll notice that the customer--the most important decision-maker of all--isn't even on the chart.

Furthermore, the top-down org chart encourages executives and managers to think of their jobs as a process of ordering employee about, rather than making it easier for employees to meet customer needs.

To fix this and put things in their proper perspective, turn your org chart upside down, like so:

At the TOP of this new "chain of command" are the customers, who are trying to accomplish their business goals.

To achieve those goals, they need the employees in your firm--salespeople, engineers, manufacturing folk--to provide them with products or services.

The managers's job is to help the employees provide those goods and services, by hiring and retaining the right people and getting them the resources they need.

The CEO's job is to help the managers do their job, so that the employees get what they need, and the customers get what THEY need.

In other words, the purpose of management (top and middle) is to help employees take care of the customer.

Does this mean that the CEO shouldn't be setting strategic direction? Of course not, because that's a hugely valuable service, as long as that direction reflects the needs of the REAL boss--the customers.

And for all practical purposes, the people most likely to understand those needs are the ones who actually work with the customers, upon whose experience the CEO should draw heavily.

Similarly, should managers should simply let employees do whatever they want? Of course not. Setting boundaries, providing coaching, mediating disagreements, and so forth are all hugely valuable to the employees and ultimately to the customers as well.